PRACTICE QUESTIONS

NSDL – DEPOSITORY OPERATIONS MODULE

1. Amendments to NSDL Bye-Laws require ________ [ 2 Marks ]

(a) no approvals.
(b) the approval of both, the Board of Directors of NSDL and that of SEBI.
(c) the approval of the Board of Directors of NSDL only.
(d) the approval of SEBI only.
(e) I am not attempting the question

2. Fungible means, as shares would not have distinguishing features such as

distinctive nos., certificate nos. etc., and __________ [ 1 Mark ]

(a) they are freely transferable.

(b) different securities of same company are interchangeable
(c) same securities of a company are interchangeable.
(d) similar securities of different companies are interchangeable.
(e) I am not attempting the question

3. For a NBFC to undertake Depository business for beneficiaries other than

itself, the networth requirement is at least ___________ [ 2 Marks ]

(a) Rs. 50 crore.

(b) Rs. 25 crore.
(c) Rs. 10 crore.
(d) Rs. 5 crore.
(e) I am not attempting the question

4. Does NSDL system permit an investor to maintain zero balance account with
a DP? [ 1 Mark ]

(a) No, the minimum balance required is securities of market value Rs. 1,000
in all accounts in the same name taken together.
(b) No, the minimum balance required per account is securities of market
value Rs. 1,000.
(c) No, the minimum balance required per account is securities of market
value Rs. 500.
(d) Yes.
(e) I am not attempting the question

5. Can clearing members and all categories of investors give a standing

instruction to receive all subsequent credits of securities in their Depository
account? [2 Marks ]

(a) No, this facility is not available.

(b) No, this facility is available only to institutional investors.
(c) Yes, this facility is available to all category of investors.
(d) No, this facility is available to clearing members pool account only.
(e) I am not attempting the question
6. Mr. Gupta having beneficiary account with DP1 sells 100 shares of ABC
company through broker XYZ who has his clearing member account with DP2.
Broker XYZ delivers the same in demat form to the clearing corporation/
house in settlement no. 1999052. Mr. Sharma having beneficiary account
with DP3 buys the same through broker PQR who has his clearing member
account with DP4. The market value of ABC company is Rs. 50/-. What are
the transaction charges levied by NSDL to DP3? [ 2 Marks ]

(a) Rs. 0.50 (100*50*0.01/100) i. e. 1 basis point of market value of

securities credited to Mr. Sharma's account.
(b) Re. 1/- (100*50*0.02/100) i. e. 2 basis points of market value of
securities credited to Mr. Sharma's account.
(c) Rs. 10/-.
(d) No charges.
(e) I am not attempting the question

7. The operations of private mutual funds are regulated by _______. [ 2 Marks ]

(a) SEBI
(b) Ministry of Finance
(c) NSCCL
(d) AMFI
(e) I am not attempting the question

8. Which of the following statements regarding nomination is false? [ 2 Marks ]

(a) Beneficial account holder cannot change the nominee.

(b) Individual beneficial account holder can nominate.
(c) Joint holders can nominate.
(d) Only individuals can be nominees.
(e) I am not attempting the question

9. The Delivery Instruction Slip is to be submitted by the investor to his DP in

__________. [ 1 Mark ]

(a) duplicate, one extra for acknowledgement

(b) no such requirement.
(c) single copy
(d) triplicate, one for acknowledgement and other for sending to NSDL
(e) I am not attempting the question

10. Which of the following statement is false? [ 1 Mark ]

(a) NSDL charges the DPs and not the investors directly.
(b) NSDL charges the DPs - custody and transaction charges.
(c) DPs charge structure to investors is laid down in the Bye Laws of NSDL.
(d) The charge structure in NSDL system is two- tier.
(e) I am not attempting the question
11. Which of the following statements regarding dematerialisation is true?
[ 1 Mark ]

(a) Transfer deed is re quired for dematerialising the physical shares.

(b) Investor can demat only those securities whose ISIN has been activated
by NSDL
(c) Odd lot shares can't be dematerialised.
(d) Shares not registered in the name of the concerned account holder (street
name shares) can be dematerialised.
(e) I am not attempting the question

12. For a company accessing the capital market for the first time _____ [2 Marks]

(a) there are no restrictions.

(b) there are norms prescribed by the Department of Company Affairs.
(c) there are RBI stipulated restrictions.
(d) there are eligibility requirements prescribed by SEBI.
(e) I am not attempting the question

13. As per the standard SEBI approved agreement to be entered into between the
DP and the client, in case the client defaults on payment of charges within the
stipulated time, the DP can charge a maximum of __% p.a. interest on such
default. [ 2 Marks ]

(a) 24
(b) 15
(c) 18
(d) None of the above as interest rate is not specified in the DP client
agreement.
(e) I am not attempting the question

14. In the context of dividend distribution, what is the full form of ECS?
[ 2 Marks ]

(a) Electronic Credit System.

(b) Extended Clearing System.
(c) Electronic Clearing System.
(d) Extended Credit System.
(e) I am not attempting the question

15. The custody fee is payable by Issuer to NSDL on a _______ basis. [ 2 Marks ]

(a) monthly
(b) quarterly
(c) yearly (calendar year)
(d) yearly (financial year)
(e) I am not attempting the question
16. In the International Securities Identification Number (ISIN), the first two
letters stand for which of the following? [ 2 Marks ]

(a) The country code.

(b) Name of the company.
(c) The term of the security.
(d) The type of the security.
(e) I am not attempting the question

17. If an investor requests for demat securities in case of rights/ bonus issue
without having a Depository account, then ______ [ 1 Mark ]

(a) Issuer/ R&T Agent will open the account on behalf of the investor and
credit it with rights/ bonus shares.
(b) rights/ bonus shares will be issued in physical form.
(c) NSDL will open the account on behalf of the investor and credit it with
rights/ bonus shares.
(d) DP will open the account on behalf of the investor and credit it with rights/
bonus shares.
(e) I am not attempting the question

18. To provide legal counter-party guarantee and eliminate the risk, __________
is created. [ 2 Marks ]

(a) Disclosure and Risk Management cell

(b) a Settlement Guarantee Fund
(c) a Market Regulation Committee
(d) an Investor Protection Fund
(e) I am not attempting the question

19. Existing securities are traded in _____. [ 2 Marks ]

(a) primary market

(b) secondary market
(c) money market
(d) barter exchange
(e) I am not attempting the question

20. The account opening form should be signed by __________ in case of minor.
[ 1 Mark ]
(a) the guardian
(b) the minor
(c) both of the above
(d) None of the above
(e) I am not attempting the question

21. Tick the true statement: [ 1 Mark ]

(a) A SEBI registered stock broker having a minimum networth of Rs. One
crore is eligible to join NSDL as a DP.
(b) A stock broker having a minimum networth of Rs. 50 lakh is eligible to
join NSDL as a DP irrespective of whether it is registered with SEBI.
(c) A SEBI registered stock broker is eligible to join NSDL as a DP. There is no
 minimum networth requirement.
(d) A SEBI registered stock broker having a minimum networth of Rs. 50 lakh
is eligible to join NSDL as a DP.
(e) I am not attempting the question

22. Which are the different levels of back-up that NSDL has put in place?
1. Machine Level 2. Data Level 3. Disaster Back-up site [ 2 Marks ]

(a) Only 1 and 2.

(b) 1, 2 and 3.
(c) Only 3.
(d) Only 1.
(e) I am not attempting the question

23. Can an investor holding dematerialised securities, apply for ECS facility in
case of cash corporate benefits? [ 2 Marks ]

(a) No, this facility is not available in case of dematerialised securities.

(b) Yes, however investor has to provide MICR code to the DP.
(c) Yes, but only for sensex scrips and by a written request to the Issuing Co.
(d) Yes, by a written request to NSDL, provided the Issuing Co. is providing
this facility.
(e) I am not attempting the question

24. Mr. Gupta having beneficiary account with DP1 sells 100 shares of ABC
company through broker XYZ who has his clearing member account with DP2.
Broker XYZ delivers the same in demat form to the clearing corporation/
house in settlement no. 1999052.The market value of ABC company is Rs.
50/-. What are the transaction charges levied by NSDL to DP2? [ 2 Marks ]

(a) Rs. 2.50 (100*50*0.05/100) i. e. 5 basis points of market value of

securities debited from broker XYZ clearing member account to clearing
corporation/ house.
(b) Rs. 0.50 (100*50*0.01/100) i. e. 1 basis point of market value of
securities debited from broker XYZ clearing member account to clearing
corporation/ house.
(c) Re. 1/- (100*50*0.02/100) i. e. 2 basis points of market value of
securities debited from broker XYZ clearing member account to clearing
corporation/ house.
(d) No charges.
(e) I am not attempting the question

25. What does SP stand for? [ 1 Mark ]

(a) Securities Provider.
(b) Secure Provision.
(c) Service Provider.
(d) Services of Post.
(e) I am not attempting the question
26. Which of the following Government Securities are available for demat and
transfer? [ 2 Marks ]

(a) Only securities issued by the Central Government.

(b) Only securities issued by the State Governments.
(c) All securities issued by the Central and State Governments. DP has to
merely write to NSDL G-Sec cell and complete some formalities to activate
the new security in the Depository system.
(d) Only securities issued by the Central and State Governments after April
1987.
(e) I am not attempting the question

27. An investor submits 10 share certificates of RPL, all in market lot of 50 shares
for dematerialisation to his DP. The face value of the share is Rs. 10/-.
Assuming that DP charges 0.2 % of the face value of securities for
dematerialisation, calculate dematerialisation charges by NSDL to the DP:
[ 1 Mark ]
(a) No charges.
(b) Rs. 1.
(c) Rs. 100.
(d) Rs. 10.
(e) I am not attempting the question

28. The registered owner of securities held in demat form is: [ 2 Marks ]

(a) The Depository participant

(b) The Depository
(c) SEBI
(d) The R&T Agent
(e) I am not attempting the question

29. What is 'shut period'? [ 2 Marks ]

(a) It is the period during which a company shall stop registering transfer of
the securities
(b) It is the period during which the Stock Exchanges will not operate
(c) It is the period when NSDL shuts it operations
(d) It is the period applicable to government securities, during which RBI will
not register transfer of securities.
(e) I am not attempting the question

30. SEBI, the capital market regulator,______________ [ 1 Mark ]

(a) is a division of the Ministry of Finance.

(b) has been set-up by self-regulatory bodies like AMFI, AMBI, stock
exchanges etc., to police the capital market.
(c) is an autonomous body set-up under an act of parliament.
(d) was set up by the Government of India to meet the requirements
stipulated by IOSCO.
(e) I am not attempting the question
31. For which of the following securities partial dematerialisation request can be
accepted? [ 2 Marks ]

(a) NSC/ KVP.

(b) Only those government securities which are permitted for the purpose by
RBI.
(c) Any securities, provided they are permitted to be held so by the Issuing
Authority.
(d) None of the above, no security can be partially dematerialised.
(e) I am not attempting the question

32. To dematerialise government securities, the investor needs to have its

Depository account with _______ [ 2 Marks ]

(a) RBI only.

(b) any DP of its choice.
(c) NSDL only.
(d) institutional DPs only.
(e) I am not attempting the question

33. The Depository account that an Approved Intermediary opens for the purpose
of carrying on the business of securities lending and borrowing is called
_________ [ 1 Mark ]

(a) Lending and Borrowing account.

(b) Intermediary account.
(c) Clearing Member account.
(d) Beneficial owner account.
(e) I am not attempting the question

34. The DP-Client Agreement _______ [ 2 Marks ]

(a) is uniform across DPs but, does not form a part of NSDL Bye-Laws.
(b) is uniform across DPs, forms a part of NSDL Bye-Laws and has been
approved by SEBI.
(c) is optional and may or may not be signed depending on the rapport
between DP and client.
(d) varies from DP to DP.
(e) I am not attempting the question

35. If an investor holds NSC/KVP in demat form, which of the following entities
should be approached for effecting change in address, change in bank details,
account number etc.? [ 2 Marks ]

(a) SP
(b) NSDL
(c) The same post office where the units were dematerialised.
(d) Any of the designated post offices by DOP.
(e) I am not attempting the question
 36. The pay-in and pay-out dates for the settlement calendar is declared:[1 Mark]

(a) by SEBI.
(b) as per the Securities Contract Regulation Act, 1957.
(c) by NSDL.
(d) by the respective Stock Exchanges.
(e) I am not attempting the question

37. In case an investor opts for allotment in demat form in case of bonus/ rights
issue without opening a Depository a/c,_______ [ 2 Marks ]
(a) the issuing co. will maintain holdings in their suspense account till investor
opens account.
(b) his entitlements will be issued in demat form and NSDL will open an a/c
for the investor.
(c) his entitlements will be issued in demat form and credited to suspense a/c
maintained by the DP.
(d) his entitlements will be issued in physical form.
(e) I am not attempting the question

38. In case of government securities sent for dematerialisation, the DP will

endorse the certificates _________ [ 2 Marks ]

(a) by writing 'Surrendered to RBI for dematerialisation' on the reverse of the

certificate.
(b) by writing 'Surrendered for Dematerialisation' on the front of the
certificate.
(c) by writing 'Tendered for Cancellation and credit to SGL A/c No. BYSL0838
of NSDL, Mumbai' on the reverse of the certificate.
(d) by writing 'Surrendered for De materialisation' on the reverse of the
certificate.
(e) I am not attempting the question

39. The custody fees (for unlisted securities of Issuers which have not paid one
time custody fees) payable by a DP to NSDL is paid _______ [ 2 Marks ]

(a) on a semi-annual basis.

(b) on an annual basis.
(c) on a quarterly basis.
(d) on a monthly basis.
(e) I am not attempting the question

40. What is the annual fee charged to a Depository Participant subscribing for
SPEED-e facility, for first setup of its DP operations? [ 2 Marks]

(a) Rs. 1 crore.

(b) Rs. 10 lakh.
(c) Rs. 1 lakh.
(d) Rs. 50 lakh.
(e) I am not attempting the question

NOTE : THIS IS A SAMPLE TEST. THE ACTUAL TEST WILL CONTAIN 60 QUESTIONS.
Answers :

1 (b) 17 (b) 33 (b)

2 (c) 18 (b) 34 (b)
3 (a) 19 (b) 35 (d)
4 (d) 20 (a) 36 (d)
5 (c) 21 (a) 37 (d)
6 (d) 22 (b) 38 (c)
7 (a) 23 (b) 39 (c)
8 (a) 24 (d) 40 (c)
9 (a) 25 (c)
10 (c) 26 (c)
11 (b) 27 (a)
12 (d) 28 (b)
13 (a) 29 (d)
14 (c) 30 (c)
15 (d) 31 (d)
16 (a) 32 (b)